CBN uncovers serial fraud in four banks

Four commercial banks have been sanctioned by the Central Bank of Nigeria (CBN) for various forgeries in foreign exchange transactions between 2007 and 2015. For these infractions, they are to refund N5.87 billion to the apex bank.

According to the CBN, the sanctions are essentially for “flagrant violation” of extant laws and regulations of the Federal Republic of Nigeria and the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995, and the Foreign Exchange Manual 2006.The four banks are Standard Chartered Bank, Stanbic-IBTC, Citibank, and Diamond Bank.

Similarly, $2.63 billion, $1.76 billion and $348.9 million were repatriated by Stanbic IBTC Nigeria, Citibank Nigeria and Diamond Bank Plc between 2007 and 2015. Okorafor said the investigations by the CBN in March 2018 became necessary following allegations of remittances of foreign exchange with irregular CCIs issued on behalf of some offshore investors of MTN Nigeria Communications Limited.

Already, the CBN has ordered the managements of the four banks and MTN Nigeria to immediately refund $8.13 billion illegally repatriated by the company to the coffers of the apex bank.Figures obtained from the CBN yesterday showed that the highest fine of N2.47 billion was slammed on Standard Chartered Bank, while Stanbic IBTC Nigeria got N1.88 billion.

Also, Citibank Nigeria was penalised to the tune of N1.26 billion, just as Diamond Bank was directed to pay N250 million for the breaches.The CBN investigation further revealed that on account of the illegal conversion of MTN shareholders’ loan to preference shares (interest free loan) worth $399.5million, $8.13 billion was illegally repatriated by the company.

Okorafor, who said the investigations took a while to ensure a thorough inquiry and give fair hearing to all parties involved, advised all banks and multinational companies in Nigeria to adhere strictly to the provisions of all extant laws and regulations in their foreign exchange transactions.

He warned that failure by the management of banks and companies to abide by the existing guidelines would attract sanctions which may include denial of access to the Nigerian foreign exchange market.

A top official of MTN, who pleaded anonymity, told The Guardian that the CBN was yet to officially send any document to the company on the matter.The official, who said the South African firm only saw the information online, added that the telecommunications firm might need to wait for an official letter from the apex bank before giving its side of the matter.

This recent fine came barely three years, precisely October 2015, after another regulator, the Nigerian Communications Commission (NCC) slammed a $5.2 billion fine on MTN for failing to deactivate about 5.2 million SIM cards that were discovered to have been improperly registered.The fine was later reduced to N330 billion following several interventions, including the coming to Nigeria of former South African President, Jacob Zuma.

The loan was staggered and the embattled telecommunications firm is expected to complete the payment by May 2019.The Executive Vice Chairman of NCC, Prof. Umar Danbatta, some few weeks back, disclosed that MTN had paid N165 billion out of the N330 billion fine.